This paper examines the structure of optimal insurance contracts for a broad class of insureds that includes both risk … averters and risk lovers and by assuming that the insureds are prudent. We specify the difference in optimal contract form … between risk averters and risk lovers. Treating these decision-makers as a unique group, we show that the optimal insurance …

Risk management decisions provide a candidate to elicit people's risk preferences empirically. In such a context, the … literature often presumes that the decision to invest in risk management and the benefit of this investment occur … intertemporal settings. To fill this gap, we study the effect of an increase in risk aversion on the demand for risk management in a …

We examine the optimal saving decision of individuals who face a multiplicative risk. An individual is defined to be … multiplicative risk prudent if multiplying a pure risk to her future wealth raises her optimal savings. We show that an individual is … multiplicative risk prudent if and only if her relative risk prudence uniformly exceeds two. Our result suggests a more restrictive …